Why Modus Only Produces FRS 102 Accounts and Why It’s the Right Choice for Your Business

At Modus Accountants, we believe in doing things properly not just ticking boxes. That’s why we only prepare FRS 102 standard accounts for our clients.

While some accountants may offer FRS 105 as a “quick and cheap” option for micro-entities, we’ve seen time and time again that these accounts often limit a business’s growth potential, reduce credibility, and fail to show the true financial health of the company.

In this post, we’ll explain what makes FRS 102 superior, why it matters to your business, and how it supports your ambitions for growth, funding, and long-term success.

FRS 102 vs FRS 105: What’s the Difference?

Both FRS 102 and FRS 105 are UK financial reporting standards, but they serve very different purposes.

While FRS 105 focuses on simplicity, it does so at the expense of quality and insight. FRS 102, on the other hand, gives a complete, transparent, and accurate view of your company’s performance.

Why Modus Only Produces FRS 102 Accounts

We made a conscious decision not to produce FRS 105 accounts because we believe our clients deserve more than the bare minimum. Here’s why:

1. A True and Fair View

FRS 102 accounts provide a more complete financial picture including deferred tax, asset revaluations, and full disclosure notes. This means your accounts actually reflect the true value and performance of your business, not just the basics required by law.

2. Better for Growth and Borrowing
If you’re seeking funding, investment, or a business loan, lenders and investors prefer FRS 102 accounts. They provide confidence and credibility  helping you secure finance faster and on better terms.

3. Future-Proof for Expansion or Exit
Some small businesses start under FRS 105 and later have to upgrade to FRS 102 when they grow or plan to sell. Switching later can be costly and time-consuming. By using FRS 102 from the start, your accounts are already at the standard expected by buyers, banks and investors.

4. Enhanced Professional Image
Your accounts say a lot about your business. FRS 102 accounts demonstrate that you are serious, compliant, and professionally managed setting you apart from competitors still using the micro-entity model.

5. Informed Decision-Making
FRS 102 accounts include richer data and disclosures, giving you and your advisors better insights into profitability, cash flow, and performance trends. That means smarter decisions and fewer surprises.

Why FRS 105 Isn’t the Right Fit for Modus Clients

FRS 105 accounts are intentionally simplified. While this can suit very small, low-activity companies, they also:

• Exclude key disclosures and performance indicators.
• Do not show deferred tax or fair value adjustments.
• Offer limited usefulness for banks or investors.
• Can make businesses appear “micro” even when they are not.

For business owners who take their company seriously, FRS 105 simply doesn’t reflect the quality or ambition of their operations.

Our Philosophy: Professional, Future-Focused Accounting

At Modus, we work with ambitious business owners those who want to grow, build value, and plan for long-term success. Using FRS 102 as our standard ensures every client receives accounts that are:

• Accurate and detailed
• Credible to lenders and investors
• Compliant with UK accounting best practice
• Ready for the next stage of business growth

Summary

Choosing the right financial reporting standard isn’t just about compliance it’s about how you want your business to be viewed.
FRS 102 shows professionalism, accuracy, and ambition. FRS 105, by contrast, can limit opportunities and understate performance.

That’s why, at Modus Accountants, we’ve made the decision to only prepare FRS 102 accounts — because our clients deserve the highest standard.

Next steps

To find out more about more click here to book a free 30 minute discovery call.

📞 01993 225030 | 📧 hello@modus-accountants.co.uk